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How fees and epoch rewards are distributed on 40 Acres.

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Origination Fee

A flat fee is charged when you open a credit line. This is a one-time cost applied at loan origination, and no penalties for early repayment.

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Epoch Reward Split

Each epoch, rewards earned by your deposited asset are automatically split as follows:
RecipientShareDescription
Borrower (loan repayment)75%Applied directly to your outstanding loan balance
Lenders (vault yield)20%Distributed proportionally to USDC vault depositors
Protocol treasury5%Supports ongoing development and operations

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Dynamic Fees (Coming Soon)

The current flat 20% lender premium will transition to a utilization-based dynamic fee model. Under this system, the lender premium adjusts in real time based on vault utilization:
  • Low utilization → lower lender premium, borrowers keep more rewards
  • High utilization → higher lender premium, attracting new USDC deposits
This creates a self-balancing vault. Capital is priced based on actual demand. When liquidity is stressed, the fee structure automatically incentivizes new deposits without any manual intervention. The flat fee model cannot produce this response. Dynamic fees replace static pricing with a market-driven mechanism that benefits both sides of the lending market.

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Zero Balance Fee

When a veNFT’s loan balance reaches zero and the protocol claims the NFT on your behalf (a “zero balance claim”), a premium is applied. This compensates for the gas and infrastructure cost of the automated claim.